| Loan Type |
SBA 7a |
| Min Loan |
$150,000 |
| Max Loan |
$2,000,000 (#1) |
| LTV |
80% – 90% (#2) |
| Interest Rate |
Adjustable, 5.00% – 6.75% (#3) |
| Term |
10 – 25 Years (#4) |
| Amortization |
10 – 25 Years |
| DSCR |
1.25 (#5) |
| Credit Score |
640 (#6) |
| PrePay Penalty? |
10% @ 10 years (#7) |
| Lock Out? |
No |
| Interest Guaranty? |
No |
| Exit fee? |
No |
| Balloon? |
No |
| Personal Guarantee? |
Yes |
| Documents Required |
Please see ‘SBA Document Requirements’ |
| Closing Time |
45 – 60 days (#8) |
| Lender Fee? |
1 point (#9) |
| Broker Fee? |
(#9) |
| Eligible Properties, Transactions |
Most all owner-occupied (#10, #11) commercial income-producing properties (Purchases, Construction); Acquisition of Business at least 3 years old; Business Only (without real property); Business Expansion; Franchises (with or without real property); and, Heavy Equipment Purchases |
| Eligible States |
All |
| Other |
1) A 10% LTV seller-held 2nd mortgage is allowed, but only if the seller is willing to put the note on “Full Standby“, meaning interest-only payments. 2) Business Acquisitions: subject-business must be in business for at least 3 years. 3) Borrowers must have industry experience in the subject-business, or a closely-related business. 4) Borrower must be willing to pledge personal/other assets, if available. 5) Life insurance might be required of borrower/guarantor. 6) Generally speaking, you can not refinance an SBA loan with another SBA loan, the one exception being if/when doing so would result in a significant improvement to the business (ie, improving its DSCR by 20% or more). Few, if any, SBA lenders are currently offering SBA refinancing.
|
| Note #1 |
Seller may provide a 2nd mortgage for any amount in excess of the maximum $2 million loan limit. (See Other #1, above) |
| Note #2 |
LTV Commercial Real Estate (most): 80% – 90%; Motels/Hotels: 80% – 85%; Business Expansion, Heavy Equipment: 80%; Business Acquisition: 75% – 80%.
|
| Note #3 |
Adjustable Rate = Index + Margin The Index is Prime (currently, 3.25%). The SBA has set the maximum limit on the Margin at 2.75%, but there are no minimum limits. Many SBA lenders have minimum Margins as high as 2.00% – 2.25%, but UnBankableCommercialLoans.com has access to several lenders with minimum Margins as low as 1.00%, currently (which could result in an interest rate as low as 4.25%).
|
| Note #4 |
Terms: Commercial Real Estate (most): 25 years; Motels/Hotels: 25 years; Business Expansion, Heavy Equipment: 10 years; Business Acquisition: 10 years.
|
| Note #5 |
DSCR: based on the last 2 years of historical cash flow |
| Note #6 |
Credit: no bankruptcy, last 7 years; no unpaid collections. |
| Note #7 |
PPP (for Commercial Real Estate/SBA loans with amortizations more than 15 years): 10% for 10 years, declining 1 point each successive year (IE, 10% year #1 through 1% year #10); Please see ‘PrePayment Penalty: Subsidy’ |
| Note #8 |
Points: Lenders typically charge 1 point, depending on the deal. |
| Note #9 |
Points: Depending on the deal (and the lender), broker is usually paid by the lender – but not always. |
| Note #10 |
O/O: Purchases: must be 51% owner-occupied, New Construction: 65% owner-occupied |
| Note #11 |
Hospitality Properties: Hotels/Motels generally must be flagged (ie, associated with a major, national chain (like Marriott or Holiday Inn). (There are other, conventional loan programs available for non-flagged hospitality properties.)/td>
|